Archive for Saturday, July 15, 2006
State's mortgage broker registry aims to end fraud
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Denver — Mortgage brokers doing business in Colorado will have to undergo criminal background checks, be fingerprinted and register with a state-run database under a new state law intended to crack down on fraud.
The new law, which took effect July 1, makes Colorado the 49th state to have rules in place to monitor the mortgage-brokerage industry. Alaska is the only state that has not regulated the market.
Under Colorado's Mortgage Broker Registration Program, brokers must also obtain a $25,000 surety bond. Individuals convicted of fraud, deceit, theft or have lost their mortgage-brokerage licenses in other states will be barred from issuing loans in the state.
"What we had seen in the past, fly-by-night brokers were coming from out of state who had bad records," said Rep. Val Vigil, D-Thornton. "We're trying to weed out these unscrupulous mortgage brokers."
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